How to turn top contacts into great relationships

An area that is receiving increasing attention in financial planning circles is the use of direct marketing to promote a planning business, writes Rohan Mead.

Traditionally, financial planners have relied on a radiating set of referrals to build their businesses. This is often a very successful approach but it can be slow in both the start-up and growth phases of a planning business.

Direct marketing has rightly been seen as a useful addition to the business development tool kit of financial planners - one that can help accelerate growth.

Two practical issues arise when contemplating direct mail. Firstly, how to build or obtain suitable lists and secondly how to best use lists once you have them.

Of the two, the first issue is relatively straightforward to address, although it may still require some effort or expense. There are a range of sources that can yield planners lists that are appropriate using indicators such as postcode, consumer habits, club memberships, motor vehicle preference and certain investment habits.

Of course, the most important list to manage and develop is that group of prospects that have some connection, no matter how tenuous with you, your business or an associate or referrer.

So, you now have a list. The next issue is how to maximise its effectiveness. What is the best approach?

The common problem for everyone is deciding the immediate next step to take.

Do you write and introduce yourself? Offer services? Make special offers? Invite the recipient to a function or seminar?

Seminars have a major role to play in any campaign. They allow advisers to demonstrate their technical skills and their capacity to help potential clients with particular financial planning challenges.

Relationship building also has two ingredients. The first is to create initial contact with potential clients. Secondly, it is important to then maintain a relationship that makes it easy for potential clients to become active clients.

Involvement in the local community through the activities of social, sporting and business organisations is a basic approach to meet prospects and to get your name and reputation known.

Next, it is important to develop this approach by working on opportunities to give presentations on subjects like investment, retirement planning or retirement income streams.

A major benefit of running your own seminars with such subjects is that they bring you into contact with people who are interested in the services that you offer.

Most fund managers will assist with this type of activity, such as providing an additional speaker, and perhaps giving other types of support.

Once your seminar presentations are well developed, you can use advertising in local media to support your program. This widens the reach of your message.

Your seminar program can also be used as a discussion point in meeting potential clients: "We're having a seminar on such and such in April and I'll send you an invitation".

It can also be used to add new names to a database of prospect clients which can be used for mailings - including invitations to future clients and newsletters.

Newsletters can also be used to promote seminars, report on them, and use relevant information in article form.

This way a total program of contact and information passing can be created that enhances your reputation and shows your expertise.

A systematic and focused approach is then needed in client development. This is not very difficult to do. While it may sound like a statement of the obvious, too often it just doesn't happen.

But to happen effectively it does need the discipline of managing the central database expertly by category, adding new names accurately and using the database regularly.

It needs to be kept alive by weeding out names that should no longer be there, adding new ones promptly, assessing opportunities, seeking feed back from time to time, and using the information it contains regularly as part of a disciplined relationship building approach.

Rohan Mead is national marketing manager at Perpetual Trustees.